Discuss about the Global Business Management for Pharmaceutical Business.
Pfizer Australia is the subsidiary of one of the well-known corporation i.e. Pfizer Inc. The company, Pfizer Australia possesses an extensive range of pioneering health care products and medicines. In the year 1956, the pharmaceutical business was started by the company in Australia. The core belief and objective of Pfizer Australia is to offer the customers the value-based products and services. The company has its high engagement in fulfilling the requirements of the customers and put extensive efforts to satisfy them. By possessing a significant relationship with the customers, Pfizer Australia keeps on improving its performance (Pfizer Inc. 2013). The company invests huge amount of capital in the research and development department so that it can relief the customers by innovating new medicines and health care products. The extent of the degree of medical range does not end by offering medicines for human care rather Pfizer Australia offer identical care and effective medicines for the animals also.
Pfizer Australia is recognized as the leading pharmaceutical company in regards with extensive research and development unit. The primary aim of the company is to supply and offer innovative and science related resources to improve the health care and wellness of the individuals at each phase of their lives. Pfizer Australia manufactures health care products, nutritional products, various vaccines, small molecule as well as biologic drugs and other medicines. There is an open innovation approach which is incorporated in the company so that there can be development of pioneering products through the external as well as internal sources. With this open innovation approach, there is a significant increase in the number of customers. For extensive value creation there are several partnerships of Pfizer Australia with various other industries. There were several risks also which the company had to experience while it’s various international expansions.
Whenever any company expands its roots in the global market then there are several opportunities as well as risks which are associated with that expansion. There were various risks faced by Pfizer Australia while entering into the markets of China and South Africa. Majorly following four risks are the most identified risks in any global expansion.
The commercial risk arises due to insufficient knowledge and understanding of the international market. If any corporation does not possess complete understanding of the overseas market then there are extreme chances of its failure after a short span of time period. There are number of causes because of which the organization can experience a failure due to commercial risks such as incompetent strength to face competition, fragile implementation of strategy, entrance at wrong timeframe, issues in operations, deprived business strategies and methods (chang, n.d.).
In the context of entering into the markets of South Africa, the biopharmaceutical unit of SA is a division of the internationally operated Pfizer inc. which is the leading pharmaceutical organization worldwide and which has its establishment from 1880. The South Africa division also covers huge diversity in its business such as departments related to ophthalmology, oncology, medication for pain, several vaccines, anti-infective medicines, cardiovascular, anti-inflammatory medicines, neuroscience etc. the stakeholders of Pfizer comprises of government officials, various healthcare professionals, media persons, pharmacy groups and the hospital groups. By all these approaches, Pfizer has complete knowledge of the South African market and possess squat chances of experiencing failure (Li, et al., 2016).
In the context of entering into the markets of China, the company has sustained by implementing various potential strategies. From the year 1980, the organization has grounded its 8 diversified units of the state-of-the-art in places like Wuxi, Dalian and Suzhou which produces products for the users of capsules, pharmaceutical industry, animal health, nutrition as well as for the health care of the customers. For entering into the Chinese market, the company had performed various researches and then through effectual implementation of the strategies it entered into the markets of China (Fatti and du Toit, 2013).
There are various kinds of financial uncertainties which encounters at the time of expanding in the overseas market which varies from country to country. Whenever there is any kind fluctuation or variation in the exchange crates of the nation where the company has planned to enter, there occur chances of financial uncertainties. There are several other things also due to which currency risk arises such as increasing inflation rate, change in transfer pricing, variation in the valuation of assets and amendments in policies regarding foreign taxation (Kotler and Kotler, 2014).
In context with the markets of South Africa and China, in spite of the increased profits and up surged sales, the company was highly cognizant regarding the generation of revenue because of various variations in the economic exchange rates. The maximum revenue of the company i.e. approximately 57 percent is generated through its global business operations. There are several risks and uncertainties in regards with the generation of these revenues due to the variation in the exchange rates of the overseas nations (wikinvest, 2016).
In an global market, the country who is planning to expand its business has to experience number of country risks which means the risks related to the nation and its attributes such as political uncertainties, legal risks and environmental threats. These comprises of uncertainties associated with mismanagement of the business operations, robust trade related barriers, extreme intellectual property rights and strict regulations regarding legal safety (Arnoldi, Bernhardt and Liang, 2014).
There are issues related to prohibition laws and patent rights prevailing in the South African markets and Chinese markets. Other laws and liabilities related to import, export and trade are also present in these markets. The company had to experience several legal obligations and issues in regards with the patent rights for few of its medicines like Sutent, Lyrica and Celebrex (Benson, 2015).
There are number of risks in regards with the cross-cultural aspect of any nation while entering into overseas expansion strategy. This risk of cross-culture is because of the diversity present in the cultures of the nations. Each nation possesses diversified traditions and culture. The variations are in the traditions, language, mindset, religion, psychological aspect, way of living and behavior.
In relevance with the Pfizer Australia, the organization had to experience issues in context with communication as well as there were language barriers in both the nations. For overcoming these issues Pfizer provide an effective training regarding the cross-cultural attributes to its workforces operating in these two nations so that the employees can easily communicate with the customers of South Africa and China (Evans, 2007).
In the Chinese market, Pfizer is regarded as the leading and recognized pharmaceutical corporation. In the year 1980, Pfizer started its operation in China. There were around fifty pioneering medicines which were launched by the company in the Chinese pharmaceutical industry and with such effective business operations it has recognized itself in the nation with a renowned and robust image. The company had to experience a lot of challenges but with great determination sand potential business strategies it had made its presence in the markets of China. In around three hundred cities of China, the company employs approximately a workforce of 10,000 employees (Pfizer, 2015). The organization has incorporated several pioneering approaches for developing its business operations in China. Centrum and Caltrate are the two recognized brands of Pfizer which were established in Chinese market. Additionally the organization is striving hard to bring several new products and services in the market. There are approximately 200 million individuals who are the customers of Pfizer in China. And maximum of those customers are from the urban and rural regions of the country (pwc, 2013). From global perspective, Pfizer is recognized as the largest drug manufacturing organization as well as the most rapidly developing pharmaceutical corporation. From overall revenue generation, approximately a total of 25 percent is gained from the operations taking place in the Chinese market. For developing its business and achieving growth, according to Pfizer, the markets of China are the most potential one in comparison with other overseas markets. The organization holds four primary business divisions in the pharmaceutical market of China which comprises of medication related to cancer care, specialty drugs, a market of already established drugs and primary care (Geschek, 2013). Pfizer is also trying to have partnership knots with various other major pharmaceutical corporations of China so that it can expand its business as well as Pfizer is facilitating the Chinese Government to provide their support to the company so that with the cooperation from the Government it can achieve extended growth by developing the health care system of China. The future objective of Pfizer is to become third largest organization in the pharmaceutical industry worldwide. Though Pfizer had to experience lot of challenges and threatening competition in the Chinese market but with effective strategies it had sustained in the industry with a recognized brand image (Loftus, 2016).
For the pharmaceutical and health care companies China offers a fast growing and developing market. The pharmaceutical industry of China is potential not only in manufacturing of medicines but also very beneficial in the development of pioneering and innovative medicines band health care products. In addition to this, the markets of China are also very fruitful for the healthcare solutions as well as for the innovation related to medicines. There are several aspects on the grounds on which it can be said that China holds a potential market for the pharmaceutical companies (Bioassociate, 2012). From the below mentioned PEST analysis it can be demonstrated that on what basis Pfizer chosen the Chinese market for its global expansion:
In respect to the healthcare sector, the Chinese Government is extremely conscious. For offering better and improved healthcare services and products to the people of China the Government is very much engaged in the development of the pharmaceutical industry. For implementation of various innovations the laws and regulation of China are very liberal and supporting. In context with the labor law, the Chinese markets are very much fascinated. The labors are made available at lower and cheapest prices as well as there is abundant supply of the labors in the nation. To the pharmaceutical organization, the Chinese Government offers various incentives and tax-relieved policies so that there can be increased number of companies who offer medicines and health care products. The research and development department is highly boosted up by the liberal tax laws prevailing in the nation.
The Chinese economy is considered as the world’s second greatest economy. China possesses the finest growth and development plans, robust economic structures and vigorous economic reforms. The Chinese Government strives hard to develop the economy from every possible way. In spite of possessing robust economic environment the country lacks in offering effective solution to the health issues and measurable health care amenities to the people of China (Chitour, 2013).
For the development of the pharmaceutical corporations there is a high need for the existence of the urbanized regions. The rapidly up surging population also plays a vital role in the growth of these companies. The increased number of diseases in the nation has inspired the pharmaceutical organizations to enter in the Chinese market (Frynas and Mellahi, 2015).
The company Pfizer is Operating in China from last few decades. To sustain in the market of china and to develop its business, Pfizer analyzed the customers’ needs effectively. And as per that it had planned its strategies. The various strategic moves of the company for entering the overseas market of comprises of acquisitions of organizations, merger with various successful companies, capturing of the potential markets and identification of the emerging markets (Zhao, 2014). Following are the strategies adopted by the company to enter the markets of China:
Conclusion
From this report it can be concluded that the pharmaceutical organizations are experiencing a number of issues and challenges in expanding their business roots in the global markets. For satisfying the requirements of the customers the company is extremely involved and engaged. Through effective analysis of the risks and opportunities, it has been evaluated that the company has experienced various uncertainties while expanding in the Chinese market but despite of these challenges Pfizer had developed its strong and robust brand image in China. With various powerful strategies such as joint venture, implementation of effective models, acquisitions etc. the company has effectively sustained in the Chinese market. The outcomes of those expansion strategies were increased partnership, enhanced growth and long-term sustainability (tradestart, n.d.). From an overall perspective it can be said that Pfizer has faced several risks and challenges but with effectual implementation of business operations and strategies it was able to mark its global presence.
References
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